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Economy
Economy
by
Chris Martenson
Executive Summary
- What Detroit tells us about continuing the status quo
- The shocking true size of the real U.S. debt
- Why time is our most valuable – but scarcest – asset
- Where your efforts need to be placed to address the big picture
If you have not yet read Part I: Why We All Lose If the Fed Wins, available free to all readers, please click here to read it first.
If we can't even have an honest conversation six years into this failed experiment about its core aspects, then it is little wonder that there's virtually no appetite for the bigger burning questions of our time, such as where do we want to be in twenty years and what do we need to do to get there?
Instead, the focus is simply on preserving the status quo and doing everything possible to maintain it. Never mind that the status quo is obviously failing in many key regards and needs some serious adjustments. All that the Fed and D.C. have in mind here is more of the same.
And this is why we will lose the war.
The Detroit Harbinger
If we want to know what happens when we ignore reality and just soldier on, we need look no further than Detroit to see how that works out. For years, that city mismanaged its finances, continually banking on the idea that eventually jobs and opportunity would return. They continued to offer – yet failed to fund – lavish pension promises to municipal employees, even though anybody with a pocket calculator could work out that the plans were not viable.
But the plans were offered, and the union reps on the other side of the table accepted the terms, even though at some point it would have made sense for someone to raise the obvious by noting that the plans were utterly insolvent and almost certain to stay that way.
Right now, the pensions in Detroit are underfunded by $3.5 billion, according to official figures. But those same officials are assuming an 8% rate of return on current pension assets, a rate that nobody is actually achieving in the pension world – thanks, in large part, to Bernanke's 0% interest rate policy.
Here's how they got to this point:
The Real Story to Focus On
PREVIEW by Chris MartensonExecutive Summary
- What Detroit tells us about continuing the status quo
- The shocking true size of the real U.S. debt
- Why time is our most valuable – but scarcest – asset
- Where your efforts need to be placed to address the big picture
If you have not yet read Part I: Why We All Lose If the Fed Wins, available free to all readers, please click here to read it first.
If we can't even have an honest conversation six years into this failed experiment about its core aspects, then it is little wonder that there's virtually no appetite for the bigger burning questions of our time, such as where do we want to be in twenty years and what do we need to do to get there?
Instead, the focus is simply on preserving the status quo and doing everything possible to maintain it. Never mind that the status quo is obviously failing in many key regards and needs some serious adjustments. All that the Fed and D.C. have in mind here is more of the same.
And this is why we will lose the war.
The Detroit Harbinger
If we want to know what happens when we ignore reality and just soldier on, we need look no further than Detroit to see how that works out. For years, that city mismanaged its finances, continually banking on the idea that eventually jobs and opportunity would return. They continued to offer – yet failed to fund – lavish pension promises to municipal employees, even though anybody with a pocket calculator could work out that the plans were not viable.
But the plans were offered, and the union reps on the other side of the table accepted the terms, even though at some point it would have made sense for someone to raise the obvious by noting that the plans were utterly insolvent and almost certain to stay that way.
Right now, the pensions in Detroit are underfunded by $3.5 billion, according to official figures. But those same officials are assuming an 8% rate of return on current pension assets, a rate that nobody is actually achieving in the pension world – thanks, in large part, to Bernanke's 0% interest rate policy.
Here's how they got to this point:
by
charleshughsmith
Executive Summary
- How to recruit the "best-fit" members
- How to develop community rules in advance to attract the best prospects and set expectations from the beginning
- Ownership/management options for running communities (including a recommended structure)
- The 6 key guiding principles for running an intentional community
If you have not yet read Part I: The Growing Appeal of Intentional Community, available free to all readers, please click here to read it first.
In Part I, we surveyed some of the more common variants of traditional communities: religious communities, family-based hamlets, cohousing and cooperative housing. In Part II, we’ll examine some of the issues that must be addressed when starting an intentional community.
I hope I won’t shock you too terribly by starting with the observation that human beings are notoriously difficult to deal with when assembled in groups. Those of you who participate in community groups need no further explanation, as you are already nodding your head in agreement.
Trying to achieve consensus on every issue is either impossible or impossibly time-consuming, and so every organization, from church to nation-state, has a structure to simplify participation and authority.
There are two sets of problems in launching an intentional community: assembling a group of people with the collective capital and will to bring a complex project to fruition, and locating a practical, affordable building or parcel for the community…
Key Considerations for Starting an Intentional Community
PREVIEW by charleshughsmithExecutive Summary
- How to recruit the "best-fit" members
- How to develop community rules in advance to attract the best prospects and set expectations from the beginning
- Ownership/management options for running communities (including a recommended structure)
- The 6 key guiding principles for running an intentional community
If you have not yet read Part I: The Growing Appeal of Intentional Community, available free to all readers, please click here to read it first.
In Part I, we surveyed some of the more common variants of traditional communities: religious communities, family-based hamlets, cohousing and cooperative housing. In Part II, we’ll examine some of the issues that must be addressed when starting an intentional community.
I hope I won’t shock you too terribly by starting with the observation that human beings are notoriously difficult to deal with when assembled in groups. Those of you who participate in community groups need no further explanation, as you are already nodding your head in agreement.
Trying to achieve consensus on every issue is either impossible or impossibly time-consuming, and so every organization, from church to nation-state, has a structure to simplify participation and authority.
There are two sets of problems in launching an intentional community: assembling a group of people with the collective capital and will to bring a complex project to fruition, and locating a practical, affordable building or parcel for the community…
by
Chris Martenson
In 1859, a massive coronal mass ejection (CME) known as the Carrington Event slammed into Earth.
Fast-forward to 2013. Our planet is orders of magnitude more dependent on its technology systems. And a solar event the size of the Carrington Event has not recurred since. How vulnerable are we, should another one arrive?
NASA: Our Technology-Dependent Lifestyle is Vulnerable to Solar Flares
by Chris MartensonIn 1859, a massive coronal mass ejection (CME) known as the Carrington Event slammed into Earth.
Fast-forward to 2013. Our planet is orders of magnitude more dependent on its technology systems. And a solar event the size of the Carrington Event has not recurred since. How vulnerable are we, should another one arrive?
by
charleshughsmith
Executive Summary
- Understanding the Fed's ability to impact (or not) health & education, pensions, and inflation
- What you can do to insulate yourself from the impacts of the Fed's financial interference
- Mindset
- Major expenses
- Debt
- Resilience
- Income
If you have not yet read Part I: The Fed Matters Much Less Than You Think, available free to all readers, please click here to read it first.
In Part I, we found that the supposedly omniscient Federal Reserve is irrelevant to the engine of real wealth creation (innovation) and actively inhibits the allocation of capital and labor to innovation by incentivizing speculation and malinvestment.
In Part II, we’ll look at what else matters that the Fed either negatively influences or does not control, as well as specific actions we can take as individuals to insulate ourselves from the collateral damage caused by misguided central bank policies.
Health and Education
We all know health and education are vital to individuals and the economy, and like everything else that matters, the Fed’s influence is limited to financial repression of interest rates that enables the Federal government to avoid the sort of healthy fiscal discipline that higher rates would demand. In other words, the Fed has widened the moat around government spending, protecting it from the hard choices that would accompany massive deficits and bond issuance in a free-market economy.
Public and Private Pensions
By at least one measure, the Fed’s repression of interest rates (designed to recapitalize the banks at no direct cost to the Fed or government) has cost savers $10.8 trillion in lost income. Since the majority of savings in the U.S. are in public and private pension plans, 401Ks, and IRAs (individual retirement accounts), the Fed’s repression of interest rates has pushed these income-security savings into risky speculative asset bubbles in stocks, bonds, and real estate, and critically undermined the financial health of pensions by radically reducing their low-risk, safe returns.
How You Can Limit Your Exposure to the Fed’s Financial Interference
PREVIEW by charleshughsmithExecutive Summary
- Understanding the Fed's ability to impact (or not) health & education, pensions, and inflation
- What you can do to insulate yourself from the impacts of the Fed's financial interference
- Mindset
- Major expenses
- Debt
- Resilience
- Income
If you have not yet read Part I: The Fed Matters Much Less Than You Think, available free to all readers, please click here to read it first.
In Part I, we found that the supposedly omniscient Federal Reserve is irrelevant to the engine of real wealth creation (innovation) and actively inhibits the allocation of capital and labor to innovation by incentivizing speculation and malinvestment.
In Part II, we’ll look at what else matters that the Fed either negatively influences or does not control, as well as specific actions we can take as individuals to insulate ourselves from the collateral damage caused by misguided central bank policies.
Health and Education
We all know health and education are vital to individuals and the economy, and like everything else that matters, the Fed’s influence is limited to financial repression of interest rates that enables the Federal government to avoid the sort of healthy fiscal discipline that higher rates would demand. In other words, the Fed has widened the moat around government spending, protecting it from the hard choices that would accompany massive deficits and bond issuance in a free-market economy.
Public and Private Pensions
By at least one measure, the Fed’s repression of interest rates (designed to recapitalize the banks at no direct cost to the Fed or government) has cost savers $10.8 trillion in lost income. Since the majority of savings in the U.S. are in public and private pension plans, 401Ks, and IRAs (individual retirement accounts), the Fed’s repression of interest rates has pushed these income-security savings into risky speculative asset bubbles in stocks, bonds, and real estate, and critically undermined the financial health of pensions by radically reducing their low-risk, safe returns.
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